Market Manipulation (Compath)

Campath, a drug used for chronic lymphatic leukemia, has been found to have some activity in multiple sclerosis. The manufacturer, Genzyme Corp., is under pressure of a hostile buyout and is in discussions with Sanofi regarding the liklihood of future profits for this drug, as noted here. In the article the difference in pricing for Campath as a leukemia drug and as a potential MS treatment was noted:

Most MS drugs, such as Biogen Idec Inc’s (BIIB.O) Tysabri, cost more than $40,000 a year. A new oral drug made by Novartis AG (NOVN.VX) called Gilenya costs roughly $50,000 a year.

Campath sells for a fraction of that. As a result, Genzyme has to persuade governments and insurance companies to pay a higher price for the drug as a treatment for multiple sclerosis than it does as a treatment for cancer.

Genzyme says it is confident it can find a way to do it — possibly by withdrawing the drug from the market as a cancer treatment and providing it for nothing.*

Medicynical Note: Drugs costing tens of thousands of dollars per year trade on the desperation of patients with serious illness and are part of reason our health care expenses are soaring. (17% of GDP) From the above it’s clear that Compath was profitable at the lower price charged chronic leukemia patients. Seeing an opportunity to charge more for a larger patient population the company of course does what any for for profit enterprise would do, gouge their customers.

Shouldn’t health care be different? Can such market manipulation be legal, after all these drugs are protected by a government provided monopoly (patents)? Or perhaps should this type government intervention in “free” markets (patent protection) be done away with?

*Addendum: I note on December 22 that the above discussion of pricing has been removed from the Reuters article. Why? Too embarrassing?

However, the quote can be found on the CNBC sitehere. (and also on other sites by googling the text)